Stocks rally on upbeat Lucent forecast

Reuters

Published 5:30 am, Tuesday, June 5, 2001

NEW YORK -- Stocks rose sharply today in a technology-led rally sparked by bullish financial announcements by several companies, including a positive forecast from Lucent Technologies Inc., whose faltering stock price had reflected the deep stock-market correction of the previous 12 months.

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"There's a growing optimism that we've pretty much hit the bottom, so people are not really paying attention to the (bad) news," said Edgar Peters, chief investment strategist at Boston-based PanAgora Asset Management Inc. "They've already taken it into account and now it's time to look forward and they think things are going to be better."

Today's rise was the fourth in a row for the Nasdaq, a string of wins unseen since mid-May. Year to date, the Dow is up 3.6 percent, the S&P 500 is down 2.8 percent, and the Nasdaq composite is down 9.6 percent.

Lucent, the struggling telecommunications-gear maker, said it expects its sales to gain despite market weakness. The report, combined with a surprisingly strong profit announcement from telecommunications software maker Comverse Technology Inc., helped overshadow concerns about the slumping U.S. economy.

"Lucent was good news, and also Comverse, which reported a solid number," said Eric Conly, senior trader at Northern Trust Co., which oversees $100 billion in equities. "They gave a firmer footing for tech in general. Also, people are afraid of missing out on the next push up. I'm seeing portfolio managers (here) start to test the water more aggressively."

Lucent shares, the most active issue on the New York Stock Exchange, rose more than 6 percent, or 49 cents, to $8.49. Lucent's stock has traded in a range from a low of $5.50 to a high of $67.1875 in the past 52 weeks. Comverse shares leaped more than 15 percent, or $8.86, to $67.52. The 52-week high for Comverse shares is $124.75 and their year low is $44.8470.